West Coast Ports Reach Breaking Point

Updated: Feb 16

Ports along the west coast of the United States are struggling to function effectively amid a major import surge from Asia and low-workforce numbers due to COVID-19. As of February 15, 2021, more than 35 boxships and cargo vessels are anchored off of the Port of Los Angeles and Port of Long Beach, with more than 20 vessels now awaiting unloading at the Port of Oakland. The Intelligence Ledger assesses the current situation to be untenable, and expects that nearly every port along the west coast will soon be inundated with cargo vessels.



How US Ports Work

Before understanding the current bottleneck, one must understand how the system works. America's current port architecture is quite literally a house of cards - remove just one, and everything falls apart.


The United States of America is a net importer, with a trade deficit of $678.7 billion in 2020 alone. In fact, the United States relies upon foreign states for both basic necessities of life and retail supply chains. The vast majority of these imports flow through ports on the west coast, namely the Port of Los Angeles, Port of Long Beach, Port of Oakland, and Port of Seattle. At each of these entry points, there are multiple entities that must run effectively to ensure the timely delivery of shipments to their intended destinations, mainly the the shipper, consignee, United States Customs and Border Protection (CBP), ocean carrier, port, terminal at port, truckers, and railroad operators. Each of these agencies, businesses, and individuals must do their job quickly and effectively in order to prevent major delays and increased costs.


Needless to say, the importation process at US ports is extremely complicated. At least ten days prior to arrival in the United States, the shipper, customs broker, and ocean carrier of a shipment must submit an Importer Security Filing (ISF) with US Customs and Border Protection in order to notify the agency of the vessel's contents. When the vessel finally arrives at a port in the United States, it berths alongside a dock and unloads its containers.


The first link in the chain is mankind itself. Healthy and motivated longshoremen and truckers are essential for the success of the system. Labor shortages and work interruptions can quickly cause a major breakdown in the system. As such, uninterrupted access to large amounts of manpower is essential if port operations are to continue successfully.


If containers are being delivered to locations within 300 miles of a port, truckers with cargo chassis's will typically be tasked with moving them to their intend resting places. Due to increased government regulation and short hours of service, said truckers can only complete one-to-two loads a day. This means that many containers within that local radius are forced to wait at port facilities and that the fees incurred by shippers skyrocket.


If containers are not being delivered within 300 miles of a port, they are typically loaded onto rail cargo cars at the port terminal for distribution to different parts of the country. Although the United States was once the king of rail and maintains the ability to move a large amount of weight across its tracks, load management is somewhat poor, meaning delays are common.


Once the containers reach their final destinations, they are unloaded by their respective owners. Only when they are unloaded can trucking companies pick up the empty containers and return them to container storage depots or rail yards.


Current Bottleneck

The current bottlenecks being experienced at the Port of Los Angeles and Port of Long Beach are likely to spread to the rest of America's ports along the west coast. Near-record volumes of containers, a growing backlog of vessels waiting to be unloaded, and the COVID-19 pandemic are all driving the US importation and exportation system to its logical limit. Specifically, the combination labor shortages, trucking delays, and infrastructure degradation threatens a great deal of harm to the national security of thee United States in a short period of time.


One of the biggest issues causing the bottleneck is a lack of skilled labor at the Port of Los Angeles and Port of Long Beach. Between the two facilities, more than 800 longshoremen have contracted COVID-19, with several hundred more are taking virus-related leaves. At the Port of Los Angeles alone, more than 1,600 workers are not unloading vessels due to COVID-19 related matters. Even local union leaders, famous for their propensity to call for general strikes, are noting that the dropping number of active workers could force major terminals to temporarily halt operations and detriment the nation as a whole.


Trucking delays at ports of entry, along with limitations on driving hours of service, are also placing an immense of strain upon the system. At the Port of Los Angeles and Port of Long Beach, the average time trucks spend waiting for containers rose from a low of 58 minutes in June of 2020 to 93 minutes in January of 2021. This means that truckers spend more time at the terminal and unable to deliver as many loads, while containers sit on the dock for a longer period of time. Anthony Otto, president of Long Beach Container Terminal (LBCT), declared in January that the majority of containers at his terminal are now sitting eight days on average, as opposed to last spring's record of three days.


Lastly, US rail infrastructure is in horrific shape. The cost to build and repair rail-line has spiked, even though demand has increased. In recent years, service to smaller lines has tanked, meaning deliveries are centered around a few key hubs instead of smaller locations. Profits have been deemed more important by providers than strategic forethought. Simply put, rail has been unable to effectively support increased demand amidst the COVID-19 pandemic.


Assessment

The Intelligence Ledger can not understate the critical nature of the current bottlenecks emerging on the country's west coast. They quite literally have the potential to upend the entire logistics system upon which the United States depends. In order to ensure operations continue unabated, the federal government must provide ports and private contractors with increased support.


The most effective tool that the executive branch can utilize to deal with pressing manpower shortages is the Stafford Disaster Relief and Emergency Assistance Act. The Stafford Act grants the executive branch the authority to provide ports with federal dollars, manpower, and resources to ensure operations continue unabated. If this is not enough, the President can also invoke the Taft-Hartley Act to force unionized longshoremen to work at terminals deemed of strategic interest.


In order to facilitate domestic cargo shipments between ports of entry, President Biden can suspend the Merchant Marine Act of 1920, otherwise known as the Jones Act. Doing this would allow the United States government to press any civilian vessel into service to help shuttle cargo between US ports along the coast. Furthermore, it would drastically cut down on excessive emissions from land-based trucks and trains, while simultaneously limiting the wear and tear on the country’s already fragile infrastructure.


Trucking delays can be solved relatively quickly. First, it would be prudent for the federal government to order driver facilities to stay open 24/7 while simultaneously using federal and state funding to help cover over-budget costs. Furthermore, the Department of Transportation should launch a free CDL training program across the United States, with special incentives for those in states with ports of entry.


Lastly, the federal government can also determine that in this time of crisis, regulation and financial burden must be limited. This can come in several forms. Customs duties and tariffs on medical items, hygiene products, imported food, and other essential products from friendly nation-states can be limited, while income tax for part-time logistics laborers and logisticians can be waived during the national emergency.


As previously mentioned, the threat this crisis poses to American national security can not be understated. As such, the government should respond swiftly and effectively, while the public must become more informed about this matter.

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